Soft milk production weighs Australian dairy exports

Australian dairy exports remained firm in August, rising by 3.16%, equivalent to an additional 6.8 million kilo in LME terms. Measured in physical commodity volumes, exports increased by 5.18%, or 2.363 tons.Year-to-date (YTD) through September, exports of butter and butteroil remained weak, as did whey and infant formula. These declines were primarily driven by reduced demand from China and South Korea, while strong growth in other product categories helped keep total export performance in positive territory for the month. Whey exports showed growth in Chinese demand but continued to fall in Vietnam and the United States. Australian Dairy exports September 2025 (tons) Product 2024 2025 ∆ ∆% Butter 1.659 567 -1.092 -65,82% Butter Oil 394 157 -237 -60,15% Cheese 12.614 12.585 -29 -0,23% SMP 9.433 12.499 3.066 32,50% WMP 5.210 5.340 130 2,50% Whey 2.185 865 -1.320 -60,41% Milk 12.714 14.607 1.893 14,89% I/F 1.371 1.195 -176 -12,84% Lactose 0 128 128 Total 45.580 47.943 2.363 5,18% The YTD pattern closely resembles the September monthly data. However, whole milk powder (WMP) also slipped into negative territory on a cumulative basis, largely due to significant reductions in imports from Thailand, Singapore, and South Korea. Overall, Australia’s YTD September export performance stood at -8.98%, representing a decline of approximately 189 million kilo LME. Australian Dairy Exports YTD September 2025 (tons) Product 2024 2025 ∆ ∆% Butter 10.716 6.794 -3.922 -36,60% Butter Oil 2.999 2.902 -97 -3,23% Cheese 120.519 123.032 2.513 2,09% SMP 118.916 109.508 -9.408 -7,91% WMP 39.382 37.904 -1.478 -3,75% Whey 21.589 11.463 -10.126 -46,90% Milk 104.656 109.011 4.355 4,16% I/F 10.441 11.889 1.448 13,87% Lactose 6.987 2.687 -4.300 -61,54% Total 436.205 415.190 -21.015 -4,82% As of September, export momentum remained negative. Export volumes in LME terms were down by 8.98% year-to-date, while commodity tonnage decreased by 4.82%, or 21.015 tons. This downturn reflects challenging global market conditions but is broadly consistent with the reduction in domestic milk supply over the same period.Weather-related disruptions across several dairy regions, coupled with tighter farm margins, have constrained milk flows throughout the year. Unfavourable conditions, farm exits, smaller herds, and persistently limited profitability are expected to continue weighing on production in the new season. National milk output for 2025/26 is forecast to fall between 0% and 2%. Chinese import demand has strengthened as domestic milk production weakens and stockpiles are drawn down. Australia milk production YTD & STD September 2025 (kilograms) Month 2024 2025 ∆ ∆% January 727.200.000 708.200.000 -19.000.000 -2,61% February 601.400.000 572.400.000 -29.000.000 -4,82% March 596.100.000 595.900.000 -200.000 -0,03% April 591.800.000 594.000.000 2.200.000 0,37% May 645.100.000 620.300.000 -24.800.000 -3,84% June 596.300.000 565.100.000 -31.200.000 -5,23% July 579.400.000 556.300.000 -23.100.000 -3,99% August 681.900.000 661.500.000 -20.400.000 -2,99% September 812.500.000 808.800.000 -20.400.000 -0,46% Year to date September 5.831.700.000 5.682.500.000 -145.500.000 -2,56% Season to date September 2.073.800.000 2.026.600.000 -43.500.000 -2,28% The global economic outlook has softened due to heightened policy uncertainty and shifting government priorities. The International Monetary Fund projects global growth to ease to 2.8% in 2025, with all advanced economies expected to record some expansion.On the import side, September showed a strong increase. Imports rose by 21.65%, or around 17 million kilo LME. In physical product terms, this represented an increase of 19.71%, or 2.743 tons. Whole milk powder was the only category to record a decline in imports. Australian Dairy Imports September 2025 (tons) Product 2024 2025 ∆ ∆% Butter 1.206 1.891 685 56,80% Butter Oil 635 1.392 757 119,21% Cheese 8.112 9.041 929 11,45% SMP 737 853 116 15,74% WMP 2.651 2.594 -57 -2,15% Whey 574 887 313 54,53% Total 13.915 16.658 2.743 19,71% Despite this, Australian dairy imports remained positive on a YTD basis. Growth accelerated from 2.30% in August to 3.24% in September, equivalent to an additional 28 million kilo LME. In product tonnage, imports increased by 3.91%, or 5.804 tons. Australian Dairy Imports YTD September 2020 (tons) Product 2024 2025 ∆ ∆% Butter 22.785 21.037 -1.748 -7,67% Butter Oil 6.395 9.386 2.991 46,77% Cheese 75.794 82.300 6.506 8,58% SMP 9.509 7.675 -1.834 -19,29% WMP 29.535 26.909 -2.626 -8,89% Whey 4.279 6.794 2.515 58,78% Total 148.297 154.101 5.804 3,91%